It's all about "Supply and Demand"

[william the wie]

So now instead of using money productively anyone with any money is positioning themselves to survive the next monetarist crash. The way you do that is to get into cash and the only question is who is going to accumulate the cash and where is it going to be stored.

It has been a hellava long time since I heard anybody advocate hoarding cash as a survival strategy.

Can you elaborate on your rationale?

Cash is king in a downturn and we have plenty of predictable and predicted downturns ahead of us:

State defaults or bailouts with IL number one with a bullet are pretty much inevitable. The main cause is employment migration away from higher tax states. Much of it is short distance migration to more fully employed states such as NH and VT in New England and NY. A lot of it is interregional as foreign label auto companies manufacture in the deep south so that pricey retailers started opening stores near Talladega if I'm not mistaken. One of my cousins went from working in a sewing factory to a pretty good salary about 30 miles west of Alexander City AL working for some upscale retailer one of Aunt Margaret's girls I believe, it could be one of Martha's girls. (I have close to 100 first cousins so I have trouble keeping them straight.) As the Euro crisis resolves itself a lot more insourcing is expected in that area. Anyhow it is a good place for real estate speculation if you have free cash.

Due to the post-baby boom decline in births 1965-8 total consumption should be all downhill from about February of next year until at least the 4th quarter of 2015. Which will create a lot of distressed assets.

One way or another interest rates differentials should break up the EMU over the next four years which will lead to more insourcing from Europe.

Shake outs in telecoms and fiberoptics should lead to some buy and hold stocks at decent prices.

The China construction bubble should pop in the lower US consumption period creating more distressed assets.

But if you don't have cash you can't buy into those once in a lifetime opportunities so hoard cash and precious metals till the shaking out is done.

 

[uscitizen]

Maybe you can splain this to me:

Oil supply is high, far outstripping demand.

Prices do not go down.How come?

What makes you think oil supply is outpacing demand?

The oil companies. It is their figures.

specualtion is driving oil prices. Chase, BOFA etc are saying that oil prices will go up therefore everyone is paying more for oil futures. It has virtually nothing to do with demand right now. It is all about Vegas style commodity trading.

 

[william the wie]

The fact of the matter is that CA can and will annihilate its budget deficit when it reopens oil drilling in the state. It may very well have more untapped but proven reserves than TX at least I have heard that claim from Californians.

 

[Mr. Sauerkraut]

i like to ask you:

If making money is earning more then investing, then is the ideal status: investing nothing but earning everything. Is this what they do in the insurances, the investmend fonds and in Las vegas?

And - doesn´t that mean, that every product has to become worser but more expensive? But if that means, that everything i can buy is trash, why should i buy anything? And when people refuse paying for trash - who will make the money?

 

[hipeter924]

[ame]http://www.youtube.com/watch?v=D9kfMx8Llcc&feature=related[/ame]

 

[Norman]

There are those who believe if you just give money to the "rich" they will "make jobs".

Or that "tax cuts" for corporations remove "uncertainty", and if you give them money, they will "make jobs".

As if "make jobs" are "magic words".

The truth is, in a capitalistic society, it all revolves around "supply and demand". If there is demand and people can pay for it, jobs will be created and corporations will hire. It's "just that simple".

If no one in the Middle Class has any money and the only people with money are rich people, then there is no demand because no one can buy anything. If no one can buy anything, then there is no supply. With no supply, there are no jobs.

For this reason, huge tax cuts for rich people do nothing for the economy. It is simply moved off shore to shelters. Obviously, unemployment benefits will spur the economy simply because the money goes right back in to the economy.

So the "myth" that every thing "trickles down" from the rich can finally be put to bed.

I don't think anyone is arguing for giving rich anything, but letting them keep their money. That is a huge difference.

Obviously giving money from one "class" or person to other is only benefit the receiver of the money. Long term such transfer will undermine the whole economy though as the payer doesn't really want to work in such system. And is probably doing wrong kind of work anyway.

 

[william the wie]

There are those who believe if you just give money to the "rich" they will "make jobs".

Or that "tax cuts" for corporations remove "uncertainty", and if you give them money, they will "make jobs".

As if "make jobs" are "magic words".

The truth is, in a capitalistic society, it all revolves around "supply and demand". If there is demand and people can pay for it, jobs will be created and corporations will hire. It's "just that simple".

If no one in the Middle Class has any money and the only people with money are rich people, then there is no demand because no one can buy anything. If no one can buy anything, then there is no supply. With no supply, there are no jobs.

For this reason, huge tax cuts for rich people do nothing for the economy. It is simply moved off shore to shelters. Obviously, unemployment benefits will spur the economy simply because the money goes right back in to the economy.

So the "myth" that every thing "trickles down" from the rich can finally be put to bed.

I don't think anyone is arguing for giving rich anything, but letting them keep their money. That is a huge difference.

Obviously giving money from one "class" or person to other is only benefit the receiver of the money. Long term such transfer will undermine the whole economy though as the payer doesn't really want to work in such system. And is probably doing wrong kind of work anyway.

No that is wrong both lottery winners and test trials of negative income tax back in the 70s demonstrated that on average the recipient does not gain either.